DAP and MAP were lower on the week as potash firmed slightly.
- DAP $97.92 below year-ago pricing -- lower 48 cents/st on the week to $440.64/st.
- MAP $125.19 below year-ago -- lower 29 cents/st this week to $446.49/st.
- Potash $120.75 below year-ago -- higher 51 cents/st this week to $301.08/st.
The national average corn basis firmed 2 1/2 cents from last week to 13 1/2 cents below December futures. The national average cash corn price fell 12 cents from last week to $3.25. Basis is softer than the three-year average, which is 5 cents below futures for this week.
DAP led our phosphate lower this week falling 48 cents per short ton regionally. Illinois led declines, softening $5.27 as many others were roughly 2 bucks lower. Three states were unchanged as Michigan firmed $4.74 and Indiana added $1.27.
MAP was lower as well softening 29 cents per short ton. The Dakotas posted mild gains along with a few others. Three states were unchanged as Nebraska led to the downside softening $6.98 and Iowa dropped $1.03.
Potash perked up just slightly due to a $9.07 hike in South Dakota. Two states were unchanged as Illinois fell $2.73 and Kansas softened $2.69.
Anhydrous applications have been stalled by soil temps, but spreaders are actively applying dry P&K across the Midwest, even as I write this post. Despite the added demand and seasonal tendencies for P&K to firm at this time of the year, we have seen very little price support in retail markets. We had expected post-harvest demand to add some price strength to phosphate, but so far, we have seen basically flat prices. That could be related to phosphate's overpriced condition. In other words, phosphate may be holding flat as demand builds because prices are already near the high end of budget tolerances.
This idea plays out in potash which is wildly undervalued at present and has room to firm slightly without raising eyebrows in response to long-awaited demand. That could explain in part why phosphate fell this week as potash firmed. The chart at left depicts potash prices from this year and from year-ago and anhydrous ammonia. These two key bellwether nutrients may be suggesting flat prices near-term. That does not necessarily mean the downtrend has exhausted, but price action in both imply a seasonal, near-term pause in the downward trajectory.
Values reported by MosaicCo this week have phosphate under pressure at terminals in Tampa, Morocco, Central Florida, NOLA and Brazil. Meanwhile, the same report shows potash ticking higher on the week. Wholesale values can give insight to the future of retail price movements as long as supply and demand remain in balance. Higher potash values may simply be the result of suppliers refilling stocks after post-harvest applications while lower DAP/MAP values are likely the result of falling ammonia, sulfur and phosphate rock costs reported by other sources.
A mild rise in potash does not scare us, and we take falling phosphate values to suggest lower prices ahead. Since P&K have nearly weathered post-harvest demand with very little price support, the ensuing offseason price pressure could be amplified. Stay hand-to-mouth for the time being on P&K.
By the Pound -- The following is an updated table of P&K pricing by the pound as reported to your Inputs Monitor for the week ended November 11, 2016.
DAP is priced at 46 cents/lbP2O5; MAP at 41 1/2 cents/lbP2O5; Potash is at 25 cents/lbK2O.
P&K pricing by the pound -- 11/17/2016